Policy & Tools: Worker Retention Policies

Worker retention policies are designed to protect workers when cities and companies change ownership or contracts. Cities frequently hire contractors to provide janitorial, security and other services, and it is not uncommon for a city to switch contractors. It is also common for companies such as grocery stores to change ownership. Unfortunately, workers often lose their jobs when these types of changes happen. This scenario can be bad for workers, owners, and clientele, but worker retention policies can create stability during such transitional periods. Worker retention polices protect the welfare of working families, they provide a stable and knowledgeable workforce for contractors or business owners, and thus maintain the provision of reliable service to clientele.

While individual worker retention policies may vary, they all operate to ensure that employees keep their jobs if there is a change in ownership of a business or contract holder. Most policies require new contractors/businesses to retain the employees of the former contractor/business for a specific amount of time. For example, the Port of Oakland Living Wage and Labor Standards Policy requires subsequent employers/contractors to retain employees for at least 90 days. Some policies go further and establish a review/re-hire process that requires contractors to give the employees of the previous contractor priority. This transitional period usually includes a just cause requirement for termination and a process for evaluating performance. Worker retention policies can also provide remedies for violation, including an order to hire or reinstate employees, back and front pay awards, and attorney's fees.

Types of Work Protected by Worker Retention Policies

Most worker retention policies apply to employees of service contractors. However, in certain circumstances, policies can be extended to other types of employees that are vulnerable during a change in ownership or contracts. For example, the Staples Community Benefits Agreement includes a worker retention policy that extends to hotel and theater employees. Some worker retention policies are focused specifically on protecting grocery workers. Managerial, supervisory, and professional employees are usually excluded from worker retention policies.

Categories of Worker Retention Policies

There are two types of worker retention policies; stand alone policies and policies that are a provision within a larger ordinance or policy. Most stand alone worker retention policies apply to a specific type and size of business within a certain jurisdiction. Grocery worker retention policies tend to be stand alone policies that apply to stores of a certain square footage that sell primarily household food for offsite consumption. These policies recognize the importance of the essential services provided by grocery store employees and seek to stabilize a workforce in order to maintain health and safety standards as changes in ownership become more common.

Worker retention policies can also be one of many provisions included in a larger ordinance or policy, such as a living wage ordinance or a community benefits agreement. Living wage policies generally apply to contracts of a certain amount between the city or county and a contractor that provides janitorial, security, and other services. These policies can include a worker retention policy. For example, the Employee Retention provision of the City of Santa Cruz Living Wage Ordinance ensures that when city contracts of more than $50,000 are terminated prior to their expiration date, employees will be retained by subsequent contractors for at least 90 days. Worker retention policies can also be included in community benefits agreements which generally apply to workers at a specific development. For example, the Los Angeles International Airport (LAX) Community Benefits Agreement requires new contractors at LAX to comply with the city worker retention policy.

Worker Retention Policy Examples

Grocery worker retention policies

City of Los Angeles Grocery Worker Retention Ordinance
This ordinance ensures that after an ownership change, grocery workers will remain employed for at least 90 days and establishes a review process through which workers will be considered for continued employment.

City of San Francisco Grocery Worker Retention Ordinance
This policy establishes concrete consequences for qualifying contractors or businesses that violate worker retention requirements.

Worker retention policies within living wage policies

County of Los Angeles Living Wage Program
Employee Retention Rights
This county-wide program requires the retention of employees under any Proposition A or cafeteria service contracts by predecessor employers.

City of Santa Cruz Living Wage Ordinance
Employee Retention
This ordinance ensures that when city contracts of more than $50,000 are terminated prior to their expiration date, employees will be retained by subsequent contractors for at least 90 days.

Port of Oakland Living Wage and Labor Standards at Port-Assisted Businesses
Preventing Displacement of Workers
New businesses receiving at least $50,000 worth of financial assistance from the Port are required to retain employees for at least 90 days.

City of San Jose Living Wage Policy
Employee Retention Requirements
This policy requires new contractors continuing the services of a previous contractor to retain employees. Food service, janitorial, shuttle transportation, parking lot management, street sweeping, and operation and maintenance of recreational facilities contractors are subject to this policy.

City of New Haven Living Wage
Under this policy, new city service contractors are required to give priority to employees of the previous city service contractor. New city service contractors must also give consideration to laid-off city employees who would have done the work if the city had not decided to give the work to a service contractor.

Worker retention within community benefits agreements

Staples Center (Los Angeles Sports and Entertainment District)
Service Worker Retention
In addition to covering service employees, this agreement also protects hotel and theater employees.

Los Angeles International Airport (LAX)
Living Wage, Worker Retention, and Contractor Responsibility
This CBA requires all new airport contractors, lessees, and licensees resulting from the expansion of LAX to adhere to the city’s worker retention policy.

Other worker retention policies

City of San Diego Service Worker Retention
This citywide policy applies to all city contracts with service contractors at city facilities larger than 17,000 square feet including sports, entertainment and convention centers.